Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower- lender relationships. Assume the Mitaka Company has a sales volume of 125,000 units at a price of $25 per unit; variable costs are $5 per unit and fixed costs are $1,800,000. Interest expense is $400,000. What is the DCL for this Japanese firm? (Round the final answer to 2 decimal places.) Degree of combined leverage X

Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower- lender relationships. Assume the Mitaka Company has a sales volume of 125,000 units at a price of $25 per unit; variable costs are $5 per unit and fixed costs are $1,800,000. Interest expense is $400,000. What is the DCL for this Japanese firm? (Round the final answer to 2 decimal places.) Degree of combined leverage X

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter3: International Financial Markets

Section: Chapter Questions

Problem 2BIC

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